Drugmaker GlaxoSmithKline has agreed to settle with plaintiffs for a total of $195 million over allegations that it monopolized the market for its nasal spray Flonase.
In one case, plaintiffs American Sales, Meijer and Meijer Distribution, on behalf of a class, agreed to settle their direct purchaser class action for $150 million. Counsel intend to seek up to one-third of the total settlement for attorney fees, according to court papers.
In one case, class representatives A.F. of L.-A.G.C. Building Trades Welfare Plan, IBEW-NECA Local 505 Health and Welfare Plan, Painters District Council No. 30 Health and Welfare Plan, Medical Mutual of Ohio and Andrea Kehoe agreed to settle their indirect purchaser class action for $35 million.
The plaintiffs in that case are both consumers and third parties who paid for or reimbursed consumers’ use of Flonase or its generic equivalents.
GSK also agreed to settle for $11 million claims from over 30 large commercial health insurers, and those insurers have agreed to give $1 million of their recovery in fees to the indirect purchaser class action counsel for “having created the benefits to be received by the SHPs (settling health plans) and/or under certain conditions for payment to the settlement class.”
U.S. District Senior Judge Anita B. Brody of the Eastern District of Pennsylvania is presiding over the cases and must approve the settlements.
“Plaintiffs allege that defendant caused the class to pay more for branded and generic Flonase through unlawfully delaying the sale of generic fluticasone propionate after the period of exclusivity expired on May 14, 2004,” court papers said. “Plaintiffs allege that defendant filed successive citizen petitions with the U.S. Food and Drug Administration in order to exclude generic competition and improperly extend its Flonase monopoly. In addition, plaintiffs allege the defendant impeded the generic from entering the market by strategically drafting and causing a monograph for fluticasone propionate to be submitted … knowing that the FDA would require any generic to meet those specifications.”
GSK argued that the plaintiffs would be required to show that every citizen’s petition was objectively based, that the petition proximately caused the FDA to delay approving generic fluticasone propionate nasal spray, and that the FDA delay, not other factors, prevented a generic from coming to the market, according to court papers.
GSK denied the plaintiffs’ allegations in the settlement papers.
“GSK has concluded, despite its belief that it is not liable for the claims asserted and that it has good defenses thereto, that it would be in its best interests to enter into this settlement to avoid further expenses, inconvenience, uncertainties of, and risks and delays associated with … the distraction of burdensome and protracted litigation,” one of the settlement agreements said.
In the indirect purchaser class action, Brody permitted a certified class to assert claims for monopolization under Arizona and Wisconsin law, unfair and deceptive trade practices under Florida and Massachusetts law and unjust enrichment under Arizona, Massachusetts and Wisconsin law. Brody also certified an end-payor class under the laws of Arizona, Florida, Massachusetts and Wisconsin.
Co-lead counsel for the direct purchaser class action are Thomas M. Sobol of Hagens Berman Sobol Shapiro in Cambridge, Mass., and Joseph H. Meltzer of Kessler Topaz Meltzer & Check in Radnor, Pa.
Meltzer did not respond to a request for comment.
Co-lead counsel for the indirect purchaser plaintiffs are Marvin A. Miller and Lori A. Fanning of Miller Law in Chicago and Michael M. Buchman, a New York attorney.
Miller did not respond to a request for comment.
Separate counsel was appointed for the two groups: the consumers and the third-party payors in that class action.
In the settlement, Deborah R. Gross of the Law Offices of Bernard M. Gross in Philadelphia was the counsel for consumers, and Kimberly R. West of Wallace, Jordan, Ratliff & Brandt in Birmingham, Ala., was counsel for the third-party payors.
That settlement also involved a reversion mechanism to be calculated by the claims administrator between the authorized claims for the third-party payors and the settling health insurers.
The law firms representing the settling health plans are Lowey Dannenberg Cohen & Hart, Rawlings & Associates and Crowell & Moring.
Gerald Lawrence, a partner at Lowey Dannenberg, said his clients, the independent settling health plans, are very pleased with the result. Lowey Dannenberg represented 30 health plans in a related Philadelphia Court of Common Pleas case, Blue Cross Blue Shield Association v. GlaxoSmithKline.
Defense counsel was Stephen J. Kastenberg of Ballard Spahr in Philadelphia.
“GSK is pleased to have reached amicable resolutions with the two classes of plaintiffs in the Flonase antitrust litigation, both the direct purchaser plaintiffs and the indirect purchaser plaintiffs,” a spokesman for GSK said.